Random Notes  

Energy Bulletin has an interesting collection of pieces up today by Byron King on "The Saga of Oil", including the one with the catchy title of "Peak Oil: Geology is Destiny".

As for Peak Oil, I have read most of what professor Kenneth Deffeyes of Princeton (not a bad school...) and Colin Campbell and Matt Simmons et al. have written on the subject. Plus, I have read a lot of the better summaries and insightful commentaries by more general science writers (Amory Lovins and Richard Heinberg come to mind). Basically, I am on board with what they are saying. Global oil production is in the process of "peaking," and soon it will level off, and then commence to decline.

Geology predicts it, and who am I to argue with geology?

Peak Oil is a real phenomenon, based on hard science. Ignore it at your peril. At root, the Peak Oil guys are right. How can I emphasize it properly? OK, they are "right, right, right." Everybody else is "wrong, wrong, wrong." These latter folks -- who are wrong, by the way -- are the equivalent of the violin section that played at the burning of Rome. Party on, dudes, but if everybody else stays wrong long enough, then, politically and economically, we will all be done for.

Despite the theories of so-called abiotic oil that are floating around (sort of the petroleum equivalent of the story of the pot of gold at the end of the rainbow), my belief is that oil comes from the unoxidized remains of ancient life forms. The remains of ancient life forms have been, essentially, cooked and refined to a higher energy state of matter by the Earth's tectonic energy (shhh...it's that "thermodynamics" stuff again). Now they are trapped inside bodies of sedimentary rocks by structure and/or stratigraphy.

Glad to see someone is holding out against the spring tide of abiotic oil theorists.

Technology review has a couple of energy related articles out - one on Fusion research in the US, and one on the revival of nuclear (fission) power, asking if the money required to subsidise this would be better spent on advanced wind turbines or hybrid car development.

Hurricane Katrina is looking ominous and may make a direct hit on key oil and gas producting areas of the Gulf of Mexico. I wonder when the oil industry will start lobbying the US government to do something meaningful to combat global warming ?

A strengthening Hurricane Katrina is taking aim at southeastern Louisiana and New Orleans - a path that will also take the storm through key U.S. oil and natural gas producing areas in the Gulf of Mexico - the U.S. National Hurricane Center said Saturday.

The NHC, increasingly confident in its forecast, said a hurricane watch is in effect for the southeastern coast of Louisiana and New Orleans. Katrina has maximum sustained winds of 115 miles per hour and could grow into a Category 4 or even an extremely dangerous Category 5 storm, the NHC said. "It is not out of the question that Katrina could reach Category 5 status at some point before landfall," NHC forecaster Jack Beven said in a discussion note at 11:00 a.m. EDT.

The storm, which just Friday appeared likely to plow into the Florida panhandle and spare offshore oil and gas production, has grown overnight into a storm that poses a significant threat to facilities in the Gulf of Mexico. In an almost worst-case scenario, the NHC forecast track shows the storm plowing through Gulf producing areas off the coast of eastern Louisiana then making nearly a direct hit on the key oil services and pipeline hub of Port Fourchon on Monday.

Even as late as Friday afternoon, the storm had been seen hewing to the eastern side of the Gulf, sparing the producing areas. Oil futures sold off sharply in New York in part because of that forecast. The Gulf of Mexico is home to about a fifth of U.S. gas production and more than a quarter of the country's oil output. Concerns oil and gas production could be disrupted in a market that already is stretched tight drove up the price of energy futures this week in New York, despite late Friday's selldown.

Billmon has a great review of Pat Robertson's homicidal outburst last week.

Bottom line: Thanks to soaring oil prices, Chavez has managed to escape the trap that usually awaits leftist Third World leaders who won't dance to the IMF's tune or kowtow to the global superpower, but who also don't want to make the great leap forward into Stalinist repression and communal poverty. For the moment at least, he doesn't have to worry about capital flight, or economic strangulation or "structural adjustments." Not as long as he's got his hands on the spigot that keeps the go juice flowing.

What's more, thanks to the failure of the 2002 coup, Chavez has been able to purge the armed forces of his opponents. Now he's re-equpping his Air Force with Russian-made jets and helicopters, and his Navy with Spanish-made ships and submarines, dispensing with the need for U.S. spare parts, technicians and military advisors. He's also severed ties with the DEA (he says he'll fight the drug lords on his own) and booted the U.S. narcs out of the country. Whatever else happens to him, Chavez isn't going to go out like Allende.

With the U.S. Army bogged down in Iraq, the invasion option is probably off the table -- although with the Cheneyites you never know for sure. The Bay of Pigs gambit (this time in the form of a gang of Columbian paramilitaries) has already been tried, and failed. Last year's recall referendum failed. (Under Chavez Venezuela has become such a communist police state that his opponents were only able to collect 1.9 million signatures on their recall petitions.) Prospects for beating Chavez in Venezuela's next presidential election also look dim -- his popular approval rating is currently north of 70%.

You can see why the right wingers are getting a little hysterical about the guy. He's holding all the high cards, and they know it. Assassination is the only trick that hasn't been played. Thus do our warriors for democracy in the Middle East reveal their true colors in Latin America -- by embracing the functional equivalent of the Brezhnev Doctrine.

Billmon also spends a lot of time talking about Iraq, and though I've never seen him mention peak oil, he does consider the oil part of the equation occasionally (though, as with almost all Iraq commentators, he can't seem to bring himself to state the obvious - the war is, and was, about oil and everything else is a sideshow or a smokecreen).

... the differences between Iraq and Vietnam shouldn't be ignored. However important Vietnam may have seemed strategically to the Cold War hawks of the Kennedy and Johnson administrations (the ur neocons) it was never critical to U.S. economic interests, certainly not in the way the Persian Gulf oil fields are now. At some level, access to oil also becomes an overrriding strategic issue. Just ask the war planners of Imperial Japan.

I'm not advocating a war for oil -- just the opposite, in fact. But I am pointing out that if U.S. failure in Iraq does spill over into Saudi Arabia or the gulf emirates, the impact here at home (and on the global economy as a whole) is going to be direct, immediate and extremely painful. If Thailand or Malaysia had fallen to communism after the U.S. defeat in Indochina (never a likely scenario, but I'm just saying) the direct impact on U.S. security or the U.S. economy would have been fairly trivial. The Asian Tigers of the '70s and '80s would have been short a couple of players -- but probably would have picked up a few somewhere else. But, if the House of Saud falls, and/or Saudi Arabia slips into the kind of madness we've seen unleashed in Iraq, I can guarantee you it won't be buried on page A-23 of the New Pravda.

In the long run, that wouldn't necessarily be an entirely bad thing (for the United States, at least) if it finally forced the American people to confront the reality of our national oil addiction and the bad case of the imperial overstretch it has created in the Middle East. If also it caused more people to question the relentless militarization of U.S. foreign policy -- or to understand that converting the battle against terrorism into a grand campaign to reshape the Islamic world has pulled America into a war that can't be won -- so much the better.

In the short run, though, the effects of destabilizing the entire Persian Gulf would almost certainly be all bad. Among other things, it would create a ripe climate for the right to blame the left for its own spectacular incompetence.

Of course, it might not come to that. As I argued several months ago, there is a plausible strategic case to be made for a rapid withdrawal from Iraq. It might help contain the damage, rather than making it worse. But there's absolutely no guarantee that would be the case. To quote (again) Juan Cole's now-famous line: Sometimes you're just screwed.

Wayne Madsen has another update on Mauritania (and I still have no idea if he is a reliable source or not), which I imagine only those with investments in companies (ie. Woodside, Hardman, ROC) that have projects in the country care about (see my previous notes on the topic).

August 24, 2005 -- Bush administration officially warms up to Mauritanian "Islamist" junta. After denouncing the recent Mauritanian military coup against President Maaouiya Sid'Ould Taya, the Bush administration has established links with the pro-"Islamist" junta led by Col. Ely Ould Mohamed Vall, a recipient of past U.S. military training. Taya is exiled in nearby Gambia but he has been offered permanent asylum by the government of Qatar, a close U.S. military ally. The Bush administration has been using the presence of the Salafist Group for Preaching and Combat (GSPC) throughout the Saharan region to justify an increase in military presence. Intelligence out of Algeria and other countries in the Sahel indicates that GSPC, said to be an ally of "Al Qaeda," is the creation of the Pentagon's parallel neocon intelligence network in cooperation with Algerian intelligence and private military contractors linked to Halliburton, which are active in the Sahel from Mauritania and Morocco to Chad and Libya.

Rigzone also has a report on Mauritania today, with the Chinese about to start exploration in partnership with Australian "oil giant" Baraka (actually a minnow even by our standards, who I'd never heard of before today - do reporters just reprint news releases from PR departments with delusions of grandeur ? Or was that a subtle form of sarcasm that I failed to get ?)

PetroChina, the nation's largest oil producer, is to explore oil in Mauritania in partnership with Australia-based oil giant Baraka. The two oil Titans have gained approval from Mauritania government, which welcomes foreign investments, with respect to an agreement between them. The two parties are to work in block 20 in Mauritania which belongs to the country's coastal basin and is rich in oil resources. The block is 180 kilometers far away from Chinguetti, the country's first commercial oil exploration project developed by Australian company Woodside.

Strangely enough, Mr Madsen has popped up in the parahistory world today, with RI looking at a rumour that he has been targeted for assassination by a US intelligence agency. I quite like the closing section, which repeats an idea they've looked at previously, that by closely observing the anticipated actions of conspirators they can prevent them. Kind of an "Observer Effect" for conspiracy theorists. I wonder what Heisenberg would make of the idea.

I came across a new Israeli peak oil blog today (possibly the same "OilsNotWell" that started the PeakOil.com thread about Iraqi oil reserves after my original "Control of Oil" post), with one post that caught my eye comparing the Bearded Lord of Evil to Asimov's Hari Seldon. Bit of a novel idea but I must admit it does make me want to go and find a copy of "Foundation" and read it again (all memories of reading it as a teenager having long since been washed away) just to see if I can spot the similarities.

On those notes, I think I'll close, and for those wondering if I've started seeing black helicopters I have to admit I did see one fly past this morning as I went for a morning walk along the harbour (and yes - I'm only mentioning this for the humour value).